FRAND does not mean license-to-all in the US

October 1, 2020

An important question in the ongoing debate over patents relating to industry standards is whether a commitment to license patents essential for the practice of a standard (SEPs) on fair, reasonable, and non-discriminatory (FRAND) terms and conditions necessitates that the SEP holder provide licences to any and all parties requesting them.

At its root, the license-to-all argument concerns the amount of royalties to be paid. It is a strategy to try to force SEP holders to license their patents to component makers in an effort to focus discussions about royalties on the prices of components rather than end-user devices. The contrary, access-to-all, view holds that:

  • Not all entities need SEP licences.
  • FRAND commitments do not necessarily require that SEP holders grant licences to all comers, but only that they make their patented technologies available by granting FRAND licences.

As Anne Layne-Farrar and co-author Richard Stark discuss in Intellectual Asset Management (IAM), neither the law nor economics justifes an across-the-board license-to-all interpretation of FRAND commitments. Such a regime would not be supported by patent, contract or antitrust law and is likely to be harmful to economic welfare.

Related capabilities